Housing prices continue to exacerbate ongoing affordability challenges, as home appreciation continued to accelerate in November, increasing 18.1%, according to a recent CoreLogic report.
While home prices continue to reach historic highs, CoreLogic expects their rate of ascent to slow over the next year. However, inflation and economic growth will lead to increases in mortgage rates.
Frank Martell, CoreLogic’s president and CEO, called 2021 one of the most “robust seller’s markets in a generation.”
“While increased interest rates may help cool down homebuying activity, we expect 2022 to be another strong year with continuing upward price growth,” he said.
In November 2021, national home prices increased 18.1% compared to the previous year and rose 1.3% from October.
Looking ahead, home-price growth is projected to slow to 2.8% by this November.
According to the report, the highest year-over-year home price increase in November was in Naples, Fla., at 36.7%, followed by Twin Falls, Idaho, with a 33.3% year-over-year increase.
Regionally, the strongest price growth was seen in the Southeast and Mountain West. Arizona had the strongest among these areas, at 28.6%, followed by Florida at 25.8% and Idaho at 25.5%.
And while interest rates on a 30-year fixed-rate mortgage averaged a record low of 2.96% last year, change is on the horizon, CoreLogic chief economist Frank Nothaft said.
“The Federal Reserve appears poised to allow interest rates to rise in 2022,” he said. “Higher rates will intensify buyer affordability challenges, especially in overvalued local markets.”